Total Risk Analysis
Every CEO understands the core of risk assessment in risk management. Risk assessment assists in forecasting the success of the company, in addition to minimizing imminent negative effects. As a CPO, I have a responsibility to provide the total risk analysis, as I am well placed in detecting uncertainties in a given situation. The total risk analysis involves recognizing the most likely threats that the business is likely to experience in the future. For instance, a supply chain in Ukraine is likely to incur losses in the future due to the political situation in Crimea. Expansion of business is unlikely, as the supply of goods is becoming inconsistent while the number of customers has gone down. Appropriate risk analysis usually incorporates mathematical, as well as statistical software programs to provide statistical analysis. Risk analysis can help the CEO to recognize and alleviate risks, but he/she cannot avoid all risks.
The circumstances surrounding Ukraine, and particularly in Crimea, are not good for global business. Several global supply chains have already started to feel reverberations that would result from imposing sanctions against Russia. For instance, Boeing Co., which rely on titanium from Russia for building its planes will experience low productivity, as much of its raw materials come from Russia. The instability in the region will affect procurement, supply chain, commodity management, and pricing. If Ukraine decides to block the oil pipelines from Russia to Europe, oil prices are likely to go up, and so are food and industrial products. Ukraine’s economy has not been strong for some time, and the situation is not likely to change soon. The political insecurity will restrict supply chains from opening more stores in the region. The regulatory bodies will become unstable due to lack of transparency. The existing stores may opt to close due to uncertainty of the situation, and many people will lose their jobs.